Fab Equipment Spending: Flat in 2013; Up 24% in 2014

SAN JOSE, Calif. — March 5, 2013 — Fab equipment spending for Front End
facilities is expected to be flat in 2013, remaining around US$ 31.7 billion, increasing
to $39.3 billion in 2014 — a 24 percent increase (See Table 1). The SEMI World
Fab Forecast also reveals that in 2013 increases for fab equipment spending
will vary by technology node and that fab construction spending will increase
an overall 6.7 percent with major spending in China. The report tracks
equipment spending at over 180 facilities in 2013.

Table 1

More than 262 updates have been made since the last
publication of the SEMI World Fab Forecast. Updates are based on announced
spending plans, including major changes for TSMC, Samsung, Intel, SK Hynix,
Globalfoundries, UMC, and for some Japanese facilities and LED facilities. Despite these adjustments, the overall
forecast for equipment spending for 2013 has remained about the same. Depending
on macro-economic risk factors, possible scenarios project a range of -3
percent to +3 percent change rate for fab equipment spending in 2013; in other
words, hovering around flat.

Though the overall outlook has improved some, fewer players
in the market can afford the rising costs for R&D and upgrading facilities
as the amount of money needed to upgrade facilities at the leading edge
technologies is immense. The World Fab
Forecast report shows increases for fab equipment spending, varying by
technology node. Fab equipment spending
for 17nm and below is expected to kick off in 2013 and increase by a factor of
2.4 to about $25 billion from 2013 to 2014.

Fab construction spending is now expected to increase 6.7
percent with construction spending to reach almost US$ 6 billion. In 2014,
however, construction project spending is expected to contract by about 18
percent. Construction spending is led by TSMC, with seven different projects
for the year; followed by Intel. Fab construction spending in China will
increase by a factor of four due to Samsung’s Mega fab in Xian.

Capacity is now forecasted to expand by just 2.8 percent for
this year and to improve to 5.4 percent growth in 2014. Excluding 2009, the years 2012 and 2013 show
the lowest growth rate for new capacity over the past ten years. However, pent-up demand is expected for some
product types because capacity additions have been cut to minimum levels while chip
demand keeps increasing. Capacity additions and equipment spending are expected
to pick up in the second half of 2013. In 2014, at least 5 percent in new
capacity will be added and fab equipment spending will increase by 24 percent. The
World Fab Forecast gives detailed capacity information by industry segment and
by individual company and fab.

Since the last fab database publication at the end November
2012 SEMI’s worldwide dedicated analysis team has made 262 updates to more than
210 facilities (including Opto/LED fabs) in the database. The latest edition of
the World Fab Forecast lists 1,146 facilities (including 310 Opto/LED
facilities), with 58 facilities starting production this year and in the near future.

The SEMI World Fab Forecast uses a bottom-up approach
methodology, providing high-level summaries and graphs; and in-depth analyses
of capital expenditures, capacities, technology and products by fab.
Additionally, the database provides forecasts for the next 18 months by
quarter. These tools are invaluable for understanding how the semiconductor
manufacturing will look in 2013 and 2014, and learning more about capex for
construction projects, fab equipping, technology levels, and products. Learn
more about the SEMI fab databases at: www.semi.org/MarketInfo/FabDatabase
and www.youtube.com/user/SEMImktstats

SEMI’s Worldwide Semiconductor Equipment Market
Subscription (WWSEMS) data tracks only new equipment for fabs and test and
assembly and packaging houses. The SEMI
World Fab Forecast and its related Fab Database reports track any equipment
needed to ramp fabs, upgrade technology nodes, and expand or change wafer size,
including new equipment, used equipment, or in-house equipment. Also check out
the Opto/LED Fab Forecast.

About SEMI

SEMI is the global industry association serving
the nano- and microelectronics manufacturing supply chains. Our 1,900 member
companies are the engine of the future, enabling smarter, faster and more
economical products that improve our lives. Since 1970, SEMI has been committed
to helping members grow more profitably, create new markets and meet common
industry challenges. SEMI maintains offices in Bangalore, Beijing, Berlin,
Brussels, Grenoble, Hsinchu, Moscow, San Jose, Seoul, Shanghai, Singapore,
Tokyo, and Washington, D.C. For more information, visit www.semi.org